SEPTEMBER 30, 2004

Can anyone save the British Grand Prix?

The future of the British Grand Prix is once again in the spotlight and it now appears to be just a question of who is going to get the blame for the event disappearing from the F1 calendar in 2005. The calendar will probably be unveiled after the upcoming FIA World Motor Sport Council and with only 17 races expected to be on the list, it looks increasingly certain that Silverstone will not be one of them.

The British Racing Drivers' Club, which owns the Silverstone track, recently made an offer to Bernie Ecclestone but it is believed that the $16m offer is rather less than the $21m that Ecclestone wants for the race. The only way forward appears to financial assistance from the British government. However the Blair government in Britain is not keen to get itself embroiled in making payments to Formula 1-related activities as it remembers with some pain the scandal that broke in 1997 when Tony Blair's then new government was savaged after a political donation from Ecclestone to the Labour Party. The next British election may not be held until June 2006 but the last thing that Blair needs is any more suggestion of deals that specifically favour Formula 1.

The loss of the British Grand Prix would be a setback for Britain but many feel it is now necessary for the race to disappear for a year to draw attention to the problems. The backlash against Ecclestone is likely to be fairly dramatic and he may wish to avoid being in the media spotlight in the run-up to the High Court action with the F1 banks over who should be controlling the way F1 operates.

While bargaining is unlikely given what happened in 1997, there is scope for a deal because F1 is about to run into serious trouble with the British authorities over tobacco advertising as the Tobacco Advertising and Promotion Act (2002) comes into effect. The act bans any advertisement that has the purpose or effect of promoting a tobacco product, including broadcast media, billboards, the Internet, direct mail, and product placement. The legislation includes bans on promotions, free gifts, coupons and sponsorships. The legislation comes into full effect on July 31 2005 when transitional arrangements regarding international sponsorships, notably F1, are banned. This law is very strict and states that "a person who in the course of a business publishes a tobacco advertisement, or causes one to be published, in the United Kingdom is guilty of an offence" and says that this includes "transmitting it in electronic form, participating in doing so, and providing the means of transmission". There is also a clause which makes it an offence to even be a party to a sponsorship agreement "if the purpose or effect of anything done as a result of the agreement is to promote a tobacco product in the United Kingdom".

The Act can result in prison sentences up to two years.

These provisions affect not only any team based in Britain but any other companies involved. This would, in theory, include TV companies and even Ecclestone's own Formula One group because it will act as be host broadcaster of various events in 2005.

The survival of the British GP in exchange for a short-term deal on tobacco is always possible but with a very active anti-smoking lobby in the UK, it is unlikely to go unnoticed.